Dancing With Derivatives 'Pas De Deux'

The newly coined phrase, from Maureen Dowd of the New York Times comes from the latest two-step by Jamie Dimon, CEO at JPMorgan, where he managed to orchestrate Wall Street's latest big bank debacle.  He'll soon be "Dancing with the Stars" in front of congress explaining his mis-adventure that created a $2 Billion trading loss, which could exceed $3 Billion when the dust settles, from a credit-default swap deal gone wrong.  Keep in mind that these are the same derivatives that helped trigger the financial crisis - sans mortgages.  Even though Ina Drew, JPM's Chief Investment Officer immediately got the ax, there will surely be more hell to pay before this is over.

Scheduled to appear in front of Congress in the spring, Dimon this week apologized to the bank's shareholders for the loss. "This should never have happened. I can't justify it. Unfortunately, these mistakes are self-inflicted," Dimon said at JPMorgan's annual meeting. And he later told reporters, "The buck always stops with me."

News of JPMorgan's 
trading loss has reinvigorated the Democrats' push to strengthen a key rule (known as the the Volcker Rule) mandated under the 2010 regulatory overhaul that would restrict banks from trading for their own profit.

Dimon has been among the most outspoken critics of the rule. He says "their recent loss came from a hedging strategy that backfired, and not a bet with the bank's own money. Whose money was it then I wonder?

He and other bank executives successfully pushed for an exemption, which would allow banks to make trades for their own profit if they are hedging against risk.

"They simply got caught short" said one anonymous trader. While J.P. Morgan shareholders continued to back Dimon, Washington isn't quite as forgiving given the huge bank bailouts recently granted.

The good news is this latest loss only wiped out about 1% of the firm's capital. Even with a $2 billion write-off the bank reported $190 billion as equity in its just-released first quarter 10Q. Dimon also said that the bank would still earn around $4 billion for the quarter, versus $5.4 billion last quarter.

Too big to fail, you bet! But what would you do?

Views: 61


You need to be a member of San Pedro News Pilot to add comments!

Join San Pedro News Pilot

San Pedro Weather

San Pedro News Pilot by email - sign up!

Delivered by FeedBurner

What is the SanPedroNewsPilot.com?

The SanPedroNewsPilot.com is the social network and information outlet for San Pedro.

Want to keep up with the news in San Pedro, become a member.


Membership has its privileges!

• Got news you think everyone should know? Blog it.
• Have a show or attending a benefit? Put it on the calendar.
• Got video of the big game? Embed it.
• Photos of the new storefront or the school play? Upload them.

Latest Activity

Sports Editor
Jamaal Kellen Street promoted Jamaal Kellen Street's blog post SPHS Football Posts Emphatic Victory Over Banning
7 hours ago
SPMG Media posted a blog post

Father/Daughter Mother/Son 2016 Math Maze Game tournament

Father/Daughter Mother/Son 2016 Math Maze Game tournamentSaturday, December 3 at 10 AM - 2 PMCarson Community Center801 E Carson St, Carson, California 90745The Academic preparation Squad and 100 Black Women of Carson is requesting your participation as a sponsor in the Mother & Son / Father &…See More
22 hours ago
Martha Flores-Gibson promoted Martha Flores-Gibson's blog post Candidate Martha Flores-Gibson District 70th Pledges For Public Safety
Martha Flores-Gibson shared their blog post on Google +1
Martha Flores-Gibson posted a blog post

Candidate Martha Flores-Gibson District 70th Pledges For Public Safety

https://youtu.be/1K38xSn-ycU http://www.marthafloresgibson.comKnown to the residents of Long Beach as an educator, public resident and gifted businesswoman, Candidate Martha Flores-Gibson district…See More
Britany Dean posted an event

Yoga4Aviva at Grand Park

November 12, 2016 from 8am to 1pm
Yoga4Aviva will be one of the largest community yoga events ever held in Grand Park in Downtown LA. Benefiting Aviva Family and Children's Services -- one of LA's leading non-profit agencies providing services to at-risk children and families -- Yoga4Aviva is aimed at raising awareness about the mental health needs of at-risk youth. The event will include a yoga master class taught by internationally acclaimed yoga instructor Rajashree Choudhury and Uprising Yoga. A special yoga class for kids…See More

Sports Editor
Jamaal Kellen Street's 2 blog posts were featured
Profile IconMartha Flores-Gibson and Amy Rocha joined San Pedro News Pilot

© 2016   Created by San Pedro News Pilot.   Powered by

Badges  |  Report an Issue  |  Terms of Service